Legislature(2005 - 2006)BUTROVICH 205
05/06/2005 08:30 AM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB268 | |
| SB165 | |
| HB53 | |
| SB165 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 165 | TELECONFERENCED | |
| += | HB 53 | TELECONFERENCED | |
| += | HB 268 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 165-CARD ROOMS & OPERATIONS
8:58:38 AM
CHAIR RALPH SEEKINS announced SB 165 to be up for consideration.
MR. CHIP WAGONER, executive director, Alaska Catholic
Conference, testified in opposition. He said the Roman Catholic
Church does not take the position that gambling is immoral.
Games of chance become morally unacceptable when they deprive
someone the ability to provide for themselves and others. The
games are already legal as indicated in the Anchorage Daily News
article dated May 4, 2005. People can gamble in their homes.
9:00:36 AM
When money and commercial gaming interests are added to the
equation it causes the gambling addition to become. SB 165 will
not replace illegal operations, it will just add to the crime.
The Alaska Catholic Conference opposes SB 165 because they feel
it will only hurt people and the state will not provide the
necessary resources to fund addiction reparation. Child neglect,
embezzlement, and suicide rates will rise.
Pathological gambling is a psychiatric disorder. A University of
Chicago study found that the presence of a gambling facility
within 50 miles doubles the prevalence of problem and
pathological gambling. The National Research Council of the
National Academy of Sciences found that some of the greatest
increases in the number of problem and pathological gamblers
came over periods of expanded gambling opportunities.
9:02:27 AM
MR. WAGONER continued the effects of gambling are a mess as the
State of Washington has found. He quoted from the Seattle Post
Intelligencer: "As legalized gambling continues its swift rise
in Washington, the quiet parallel growth of problem gambling has
marched right along with it, often with disastrous
consequences." Problem gambling is an emotional disorder that is
under the radar screen because it is not as visible as needle
marks and public intoxication. According to the Seattle Post
Intelligencer, thousands of lives in Washington have been ruined
due to gambling. There is increased indebtedness, bankruptcies,
crime, divorce, and suicide. The troubles have cost the State of
Washington millions of dollars a year.
9:04:18 AM
Experts and gamblers themselves say gambling addictions are more
difficult to spot than alcoholism or drug addiction, and can be
more difficult to quit. The National Council on Problem Gambling
is not for or against gambling; their purpose is to help people
who have gambling addictions. However they recognize the
societal costs are very high.
Bankruptcy lawyers in Seattle are seeing more filings caused by
gambling troubles. There has been a definite increase in the
last 10 years. King County deputies regularly see the effects of
gambling in the prosecution of domestic violence and child
neglect cases.
9:06:10 AM
One reason funding for gambling addiction is hard is because
gambling is a hidden disease. The State of Oregon has funded 27
treatment clinics and hired more than 50 counselors. More than
10,000 people have entered their state treatment programs since
1995, which has cost the state 4.5 million dollars. The State of
Alaska does not have a single gambling addiction certified
counselor. The economic benefits of SB 165 will not even come
close to taking care of the negative costs associated with SB
165. The National Gambling Impact Study Commission report, the
largest most comprehensive study performed in the United States,
determined problem gamblers cost society $715 dollars each on a
yearly basis and pathological gamblers cost society $1,200 each.
9:08:02 AM
For those reasons the Alaska Catholic Conference urges the
committee to not pass SB 165. It only hurts people and Alaska
cannot afford it.
9:08:52 AM
SENATOR HOLLIS FRENCH commented his research found that
electronic gaming machines contribute to problem gambling. He
asked Mr. Wagoner whether he had specific research focusing on
poker playing.
MR. WAGONER agreed electronic gaming machines are called the
crack cocaine of gambling. The faster the game the more likely
it will cause addiction. Everything that has an immediate payoff
has addiction potential. He urged the committee to have someone
who deals with gambling disorders testify on SB 165. However, it
is known that when gambling is increased, the disorders are also
increased.
9:12:00 AM
SENATOR FRENCH asked Mr. Wagoner whether he would close pull-tab
shops, given the chance.
MR. WAGONER asserted he would. People sit by themselves in pull-
tab parlors hoping for the big break. Many are desperate to win.
It has a sad effect on families and kids. Children are left in
the parking lot for hours while their parents gamble. Gambling
games are designed to separate people from their money.
9:14:31 AM
SENATOR JOHN COWDERY asserted people are currently gambling in
illegal establishments.
9:17:43 AM
MR. WAGONER said the Roman Catholic Church does not look at
gambling as sinful. It is the effects that are concerning. SB
165 will open the door with commercial gaming and there will be
more pressure on the Legislature to expand it.
9:20:32 AM
MS. SUSAN BURKE, attorney retained by Perry Green to look into
the implications of SB 165 as it relates to Indian gaming,
offered her comments. She looked at two questions primarily. The
first was whether enactment of SB 165 would open the door to
casino-type class 3 gaming. Her research shows it would not. The
second question was whether the enactment of SB 165 would open
the door to additional kinds of class 2 gaming beyond what is
already authorized under Alaska law. Her research shows it would
not.
CHAIR SEEKINS interrupted to say from a strictly legal
standpoint that would be a logical conclusion.
MS. BURKE said her main point is Indian tribes today under the
Indian Gaming Act, if they fulfill all of the other
requirements, could engage in poker, cribbage, bridge, and pan
card rooms today under existing law because Alaska law does not
explicitly prohibit non-banking card games in any location in
the state. Social card games in homes are not prohibited under
Alaska law; therefore they would be the kind of card game that
Indian tribes could engage in. There are a number of federal
laws and regulations an Indian tribe would have to comply with
in order to get a license. Equally important, they could do so
only on Indian lands the particular tribe has jurisdiction over.
9:24:17 AM
MS. BURKE added Native claims settlement lands would not
qualify. The definition of "Indian lands" under the federal act
is "lands within the limits of a reservation" and the only
reservation in Alaska is Metlakatla. The other category is "any
lands the title to which is either held in trust by the United
States for the benefit of an Indian tribe or individual, or held
by an Indian tribe or individual subject to restriction by the
United States against alienation or sale."
CHAIR SEEKINS asked whether someone could simply plead sovereign
immunity and thereby protect the land from alienation.
MS. BURKE responded alienation is a voluntary thing and unless
the federal government has imposed restrictions on the voluntary
act, it wouldn't qualify as Indian lands.
9:26:26 AM
CHAIR SEEKINS mentioned a California case where one Indian tribe
bought land and claimed it as official Indian land where they
could start a casino. The State of California contested it on
the grounds that the land was once under the jurisdiction of
California. Unless the state acts affirmatively to remove the
jurisdiction, it remains under the jurisdiction of the state.
SENATOR FRENCH asked the relationship between Native corporation
land and Native corporation shares, which are not alienable.
MS. BURKE replied a person couldn't conduct a gaming operation
on a share of stock.
CHAIR SEEKINS answered Native corporation land is not Indian
land. It is subject to alienation and can be sold or traded.
Native corporations themselves do not have sovereign immunity.
9:29:08 AM
SENATOR GENE THERRIAULT said there was a constant push to expand
sovereign immunity on Native lands. The Rural Justice Commission
is being steered toward a request to transfer all the Native
corporate land into Indian land.
MS. BURKE said regardless of where the Indian lands laws are,
Alaska law is such that Indian tribes could implement anything
in SB 165 today. The tribes would have to exercise governmental
powers on the land itself and Metlakatla seems to be the only
place where that happens.
CHAIR SEEKINS said he would disagree if her conclusion were
tribes in Alaska today could operate class 2 gaming without a
permit from the state.
MS. BURKE agreed they would have to go through the Indian Gaming
Act, as well as get a permit and follow certain regulatory
requirements.
9:32:26 AM
SENATOR THERRIAULT speculated the Native organizations have
determined there is either not a lot of money in the gaming
operation or the lack of authorized land is why they haven't
pursued it.
CHAIR SEEKINS referred to two applications that were denied and
a third in Klawock that was granted an Indian Gaming Regulatory
Act (IGRA) permit. It is not outside the realm of possibility
that IGRA will grant permits.
MS. BURKE emphasized action on SB 165 will not avoid IGRA
issuing permits and the results that occur forthwith. The only
way the Legislature could stop Indian gaming is to repeal the
exemption in Alaska law for social gaming in the home.
9:34:52 AM
CHAIR SEEKINS said the more money that might be made from state
authorized gambling; the more motivated the tribes may be to get
permits.
MS. BURKE said proponents of SB 165 must believe there is money
in the operation of card rooms otherwise they wouldn't want to
do it. She does not know why Indian tribes have not come to the
same conclusion.
CHAIR SEEKINS agreed the motivator is money and not recreation.
MS. BURKE confirmed that is absolutely correct.
SENATOR HUGGINS said it might be like moving the capitol, which
was on the back burner until recently.
MS. BURKE said virtually by introducing SB 165 the cat is out of
the bag.
9:36:56 AM
CHAIR SEEKINS said the more money that is involved, the more
temptation for groups to persuade the gaming commission and the
federal courts that they are Indian tribes for the purpose of
IGRA and that there are parcels of land in Alaska that are
Indian lands as defined by IGRA.
MS. BURKE emphasized whether SB 165 passes or not, Indian tribes
could still enter the gaming business under Alaska law.
CHAIR SEEKINS agreed so long as they comply with state law,
which means no one takes a rake.
MS. BURKE disagreed. She said the only state law limits have to
do with maximum wagers, maximum pots, and hours of operation.
SENATOR THERRIAULT speculated there isn't enough money in the
game rooms to gain the interest of Indian tribes.
9:39:14 AM
MS. BURKE disagreed. She asserted somebody must see it as a
viable economic advantage else they would not be pushing SB 165
legislation.
SENATOR FRENCH commented location would be difficult.
CHAIR SEEKINS wondered the motivation for the current push to
transfer corporate lands into Indian lands.
SENATOR COWDERY agreed location would be a deterrent for the
tribes. He suggested a local option where communities could vote
SB 165 out.
9:42:32 AM
CHAIR SEEKINS stated for the record he is not in favor of
gambling and has no intent to vote for SB 165 on the Senate
Floor.
9:44:08 AM
MR. RYAN MAKINSTER, staff to Senator John Cowdery, offered to
answer questions.
CHAIR SEEKINS suggested a limit to five-dollar wager.
SENATOR COWDERY commented that informed players could make
multiple raises in poker.
MR. MAKINSTER said Washington State limits the raises to three.
SENATOR FRENCH noted that would be $240 maximum out of pocket
for any game.
9:48:09 AM
SENATOR COWDERY said it is rare for everyone to stay in the game
until the end. Generally a table of ten ends up with maximum of
three at the end.
CHAIR SEEKINS asserted he does not want high stakes gambling.
SENATOR HUGGINS asked how low stakes would change the structure
of SB 165.
MR. MAKINSTER said the house has no stake in the game.
CHAIR SEEKINS interrupted to assert they do; the higher the pot,
the bigger the rake.
MR. MAKINSTER said SB 165 could set the rake at two or four
dollars.
9:50:14 AM
CHAIR SEEKINS said SB 165 has been portrayed as recreational
gambling and it should be more for fun and not big money.
9:52:18 AM
CHAIR SEEKINS proposed a limit of a five-dollar wager and a 15-
dollar per person pot.
MR. MAKINSTER asserted that rule would ruin the game of poker.
He said limiting wagers would take the zeal out of the game.
CHAIR SEEKINS said each round doesn't always have to reach
maximum.
9:54:18 AM
CHAIR SEEKINS said recreational gambling should not allow
unlimited pots. That would be raising the risk of making it a
fast game.
9:56:18 AM
CHAIR SEEKINS said illegal enterprises are not interested in a
5-dollar limit because there isn't enough profit.
SENATOR GUESS wondered why five dollars is too low of a limit.
MR. MAKINSTER said the 15-dollar pot is what is too low. It
would be difficult to control the pot size without limiting the
raises.
9:58:31 AM
CHAIR SEEKINS referred to Page 2, lines 24-26, which allows a
person to buy chips on credit. He expressed disagreement with
running up a tab. He said he is trying to avoid gambling debts.
SENATOR COWDERY said the establishment owner has nothing to do
with credit. Credit happens between players.
SENATOR FRENCH asked whether they were talking about using
credit cards to buy chips.
CHAIR SEEKINS clarified it was in-house credit.
10:01:48 AM
MR. MAKINSTER pointed out some states disallow buying at the
table. A person has to physically leave a table in order to buy
more chips.
CHAIR SEEKINS said he would like to address that in SB 165.
10:02:54 AM
SENATOR HUGGINS commented he has noticed ornate items in Las
Vegas pawnshops.
10:04:27 AM
CHAIR SEEKINS expressed interest in a requirement that all
employees would need a license and they could not be convicted
felons.
SENATOR FRENCH referenced the provision for an occupational
licensing but stated it wasn't clear to whom that applied.
CHAIR SEEKINS said he would require it to be every employee of
the facility, including the janitor.
10:07:02 AM
SENATOR HUGGINS asked Mr. Makinster to clarify the training
involved.
MR. MAKINSTER said if legislation required employees to be
licensed, the provision allows a place to train certified
dealers.
SENATOR COWDERY asked Chair Seekins whether it was
constitutional to require a janitor to be licensed.
CHAIR SEEKINS answered yes. He said that pull-tabs are close to
being strong-arm operations. He is not interested in having
reconstituted felons be dealers.
10:11:09 AM
SENATOR GUESS noted the language on Page 10, line 24;
"character, reputation, experience" are subjective words. She
expressed concern over equal opportunity.
MR. MAKINSTER agreed it was a gray area.
CHAIR SEEKINS said the Charitable Gaming Act is limited to non-
profit corporations that are resident to the State of Alaska. He
said he intends to ask legislative legal whether they can place
the same restriction on SB 165.
10:13:44 AM
SENATOR COWDERY countered residence is a sticky issue.
SENATOR GUESS noted Page 14, lines 4-5; opens up opportunities
for discrimination. She questioned who would judge the character
of another and whether that could be done fairly.
SENATOR HUGGINS asked whether employees and owners would be
prohibited from gambling in the establishment where they work.
MR. MAKINSTER answered it is not prohibited in SB 165. Other
states do not allow employees to gamble in their own
establishment and card room owners are typically not allowed to
gamble in the state.
10:16:46 AM
SENATOR FRENCH said the bulk of concern from his constituents is
they are not opposed to card rooms but they are concerned with
how the licenses would be issued. He asked Senator Cowdery
whether he would be opposed to a public comment period.
SENATOR COWDERY agreed that would be proper.
CHAIR SEEKINS pointed to a KTUU survey, which showed more than
60 percent of the people polled are against card rooms.
SENATOR GUESS said her primary concerns are when legislation
uses words like "character and reputation" in regards to who
gets licenses and jobs. It is unclear who decides who gets
licensed and who decides the character of another.
CHAIR SEEKINS asked Mr. Makinster whether SB 165 requires a
local election prior to authorizing card room in a community.
MR. MAKINSTER answered the only election is for municipalities
under 30,000. The sponsor is willing to broaden that to all
communities.
SENATOR FRENCH clarified it would be a positive opt-in election.
10:20:28 AM
SENATOR GUESS suggested there was additional language coming
from the House.
10:22:19 AM
SENATOR GUESS asked whether the class C felony of "cheats at a
card game" is being defined on Page 19, lines 16-19.
MR. MAKINSTER responded the verbiage has to be somewhat
ambiguous because cheaters tend to stay ahead of the game. The
definition points to several devices and instances where a
person could be assumed to be cheating.
10:24:02 AM
MR. MAKINSTER added the courts would be tasked with deciding the
felony charge.
SENATOR GUESS asked whether there is a lot of cheating in non-
banking games, such as rummy, cribbage and bridge.
MR. MAKINSTER responded the majority of cheating is someone
trying to beat the house using by using card counters.
SENATOR GUESS referred to Page 3, line 13; selecting "applicants
that promote the most economic development" and expressed
concern over the ambiguous definition.
10:27:08 AM
CHAIR SEEKINS offered someone willing to build a new building
rather than putting the business in a used building would
fulfill that function.
SENATOR GUESS said she wants to ensure an even playing field and
that all Alaskans have a shot at the business.
CHAIR SEEKINS held SB 165 in committee.
SB 165-CARD ROOMS & OPERATIONS
5:21:42 PM
CHAIR RALPH SEEKINS announced SB 165 to be up for consideration.
He referred Page 5 lines 13-23 and noted the bill was excluding
any applicant that has a pending registration filed with the
United States Security and Exchange Commission (SEC). He asked
Mr. Makinster whether there were any corporations in Alaska who
meet that requirement.
MR. RYAN MAKINSTER, staff to Senator John Cowdery, did not know.
CHAIR SEEKINS speculated it would be a major sized corporation.
MR. MAKINSTER countered not necessarily. A person could have
other holdings.
5:23:58 PM
SENATOR HOLLIS FRENCH asked what it means to have a pending
registration filed with the SEC.
MR. MAKINSTER advised the language was added to the bill by
legislative legal. When a company files to be on the stock
exchange there is a period where the company has to be silent
about certain information because it may affect the stock price
on opening day.
SENATOR FRENCH asked the type of information the company is
allowed to withhold.
MR. MAKINSTER answered information regarding the specific
company. He said it doesn't preclude them from giving out other
information.
CHAIR SEEKINS disagreed.
5:26:05 PM
CHAIR SEEKINS said they would have to provide names of all
persons holding 20 percent interest but would not be subject to
the scrutiny any other applicant would be. He said it appears
the wealthiest person would not be required to provide much
information including the state they are registered in.
5:29:02 PM
MR. MAKINSTER said a company that has a filing pending with the
SEC is in an information black out period.
CHAIR SEEKINS asserted at that point he would not be interested
in them being an applicant.
SENATOR FRENCH concurred.
SENATOR JOHN COWDERY concurred.
5:31:44 PM
CHAIR SEEKINS moved Amendment 1
Page 5, line 15, after the word registration delete the
comma, insert semi-colon. Delete the rest of sub-subparagraph
(i) and delete sub-subparagraph (ii).
Hearing no objections, the motion carried.
SENATOR FRENCH moved Amendment 2.
Page 5, line 28, after the word "indicted", insert the word
"charged."
Hearing no objections, the motion carried.
SENATOR FRENCH moved Amendment 3.
Page 10, following line 20:
Insert a new subsection to read:
"(h) Before issuing a license, the department
shall provide notice to the public of the identity of the
applicant and the location of the proposed card room and
allow at least 30 days for public comment."
CHAIR SEEKINS objected for explanation.
SENATOR FRENCH advised the amendment was like a liquor license
or a zoning change. It gives the citizens an opportunity to
weigh in.
5:35:47 PM
CHAIR SEEKINS removed his objection. Hearing no others,
Amendment 3 was unanimously adopted.
CHAIR SEEKINS recessed the meeting to the call of the Chair at
5:35:59 PM.
CHAIR SEEKINS reconvened the meeting at 7:36:10 PM. He referred
to the State of Washington's administrative code regarding
limits on wagers and read through the information.
7:37:54 PM
MR. MAKINSTER commented SB 165 gives the DOR the ability to
regulate wagers.
CHAIR SEEKINS asked Mr. Makinster whether the information in the
State of Washington administrative code is a standard.
MR. MAKINSTER advised it was the same between Washington and
Oregon.
7:41:30 PM
CHAIR SEEKINS noted the ante could be $25 and any additional
wager could only be $25 with a maximum of three additional
rounds.
MR. MAKINSTER said correct.
SENATOR COWDERY commented it would be rare in a game for all
people to be in until the end.
7:45:47 PM
CHAIR SEEKINS advised the committee they would be tasked with
setting a maximum wager.
CHAIR SEEKINS held SB 165 in committee.
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